Feds to investigate Md. exchange

The HHS Office of the Inspector General is launching an investigation into Maryland’s troubled health insurance exchange, the latest target of expanding federal oversight of poorly performing Obamacare exchanges.

As requested by Rep. Andy Harris, a Maryland Republican and foe of the Affordable Care Act, investigators will look at the procedures state officials followed in contracting with the tech companies behind the site’s botched development and at troubles with Medicaid enrollment that are expected to significantly drive up costs.

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“Maryland officials ignored early warning signs and chose to waste and abuse federal taxpayer money by opening up what they knew was a flawed exchange to the public,” Harris said in a statement Monday morning. The investigation will “bring to light how hundreds of millions of dollars were wasted on one of the worst exchange rollouts in the country.”

The Maryland Health Benefit Exchange is among the worst performing in the country, having enrolled just 39,000 people in private plans as of last week. And that’s despite the enthusiastic embrace of the law by state officials. State legislators are already reviewing the array of problems, which have political as well as fiscal implications.

A spokesperson for the Maryland Health Connection declined to comment Monday.

The IG’s move, first reported by The Baltimore Sun, follows the announcement last week that the Government Accountability Office would look into Cover Oregon, which has not been able to enroll anyone entirely online yet, and other exchanges.

Both Maryland and Oregon are Democratic-led states that embraced the ACA and eagerly agreed to build their own new health insurance exchanges. Both pledged to be pace-setters, but both ended up having technical messes that hampered coverage enrollment.

Maryland’s botched rollout has become an issue in the Democratic gubernatorial primary — a headache for Lt. Gov. Anthony Brown, the front-runner who was the point man on Obamacare implementation for the administration of Gov. Martin O’Malley. Doug Gansler, the state attorney general who is also running for the governor’s seat, has slammed Brown for his role and urged that Maryland residents be allowed to choose whether they want to use the state exchange or the federal one instead.

The inspector general’s office will be investigating five areas flagged by Harris and Rep. Jack Kingston (R-Ga.), who chairs the House Appropriations subcommittee that oversees HHS. In particular, the IG will be looking at the contracting process, which awarded a $193 million contract to Noridian Healthcare Solutions to build the exchange. State officials fired the company last month.

Harris’s office also said the IG would be looking into problems with Medicaid enrollment, specifically the computer systems that determine who is eligible for the public health insurance program. The state has already received a waiver from federal health officials to wait six months before conducting so-called re-determinations, a process in which some enrollees typically fall off the Medicaid rolls. State officials estimated that the cost of the delay would total about $30 million in 2014 and 2015.